20. Commitments and Contingencies

The Partnership, from time to time, may be subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are frequently covered by insurance. If it has been determined that a loss is probable to occur, the estimated amount of the loss is accrued in the consolidated financial statements. While the resolution of these matters cannot be predicted with certainty, the Partnership believes the outcome of such matters will not have a material effect on the Company’s consolidated financial statements.

Bond Purchase Commitments

As part of the Partnership’s strategy of acquiring mortgage revenue bonds, the Partnership will enter into bond purchase commitments related to mortgage revenue bonds to be issued and secured by properties under construction. Upon execution of the bond purchase commitment, the proceeds from the mortgage revenue bonds issued will be used to pay off the construction related debt and mortgage revenue bonds. The Partnership bears no construction or stabilization risk during the commitment period. The Partnership accounts for the following bond purchase commitments as available-for-sale securities and reports the asset or liability at fair value. Changes in the fair value of bond purchase commitments are recorded in other comprehensive income.

The following table summarizes the Partnership’s bond purchase commitments at December 31, 2016 and 2015:

Bond Purchase Commitments	Commitment Date	Maximum Committed Amounts for 2017		Maximum Committed Amounts for 2018		Rate			Closing Date ⁽¹⁾	Fair Value at December 31, 2016		Fair Value at December 31, 2015
15 West Apartments	July 2014	$	-	$	-		6.25	%	Q4 2016	$	-	$	945,009
Villas at Plano Gateway Apartments	December 2014		20,000,000		-		6.00	%	Q2 2017		838,200		1,469,213
Village at Rivers Edge	May 2015		11,000,000		-		6.00	%	Q2 2017		467,720		636,560
Palo Alto	July 2015		19,540,000		-		5.80	%	Q3 2017		627,429		1,439,600
Village at Avalon	November 2015		-		16,400,000		5.80	%	Q2 2018		466,100		1,143,978
Total		$	50,540,000	$	16,400,000					$	2,399,449	$	5,634,360

⁽¹⁾ The closing date is actual or estimated.

Property Loan Commitments

In October 2015, ATAX Vantage Holdings, LLC, a newly formed wholly owned subsidiary of the Partnership, committed to loan approximately $17.0 million to an unrelated third party to build two new multifamily residential properties. The Partnership’s remaining maximum commitments totaled approximately $3.4 million at December 31, 2016. See Note 11 for additional information related to the property loans.

Other Guarantees

In connection with the sale of the Greens Property in 2012, the Partnership entered into guarantee agreements with an unaffiliated entity under which the Partnership has guaranteed certain obligations of the general partner of the Greens of Pine Glen limited partnership, including an obligation to repurchase the interests of the BC Partners if certain “repurchase events” occur. Remaining potential repurchase events relate primarily to the delivery of LIHTCs, or tax credit recapture and foreclosure. No amount has been accrued for this contingent liability because the likelihood of a repurchase event is remote. The maximum exposure to the Partnership at December 31, 2016, under the guarantee provision of the repurchase clause is approximately $2.8 million and represents 75% of the equity contributed by BC Partners to date.

In connection with the Ohio Properties transaction in 2011, the Partnership entered into guarantee agreements with an unaffiliated entity under which the Partnership has guaranteed certain obligations of the general partner of these limited partnerships, including an obligation to repurchase the interests of the BC Partners if certain “repurchase events” occur. Remaining potential repurchase events relate primarily to the delivery of LIHTCs, or tax credit recapture and foreclosure. No amount has been accrued for this contingent liability because the likelihood of a repurchase event is remote. The maximum exposure to the Partnership at December 31, 2016, under the guarantee provision of the repurchase clause is approximately $4.4 million and represents 75% of the equity contributed by BC Partners.

The 50/50 MF Property has a ground lease with the University of Nebraska-Lincoln with an initial lease term expiring in March 2038. There is also an option to extend the lease for an additional five-year period. Annual lease payments are $100 per year. In conjunction with the ground lease, The 50/50 MF Property has entered into an agreement whereby it is required to make regular payments to the University of Nebraska-Lincoln based on its revenues. At December 31, 2016, the minimum aggregate annual payment due under the agreement is approximately $122,000. The minimum aggregate annual payment increases 2% annually until July 31, 2034 and increases of 3% annually thereafter. The 50/50 MF Property may be required to make additional payments under the agreement if its gross revenues exceed certain thresholds. The agreement will terminate upon termination of the ground lease. The 50/50 MF Property reported expenses related to the agreement of approximately $123,000, $120,000 and $50,000 for the years ended December 31, 2016, 2015 and 2014, respectively.

As the holder of residual interests issued in connection with its TOB, Term TOB, Term A/B and TEBS Financings, the Partnership is required to guarantee certain losses that can be incurred by the underlying trusts created in connection with these financings. These guarantees may result from a downgrade in the investment rating of mortgage revenue bonds held by the trust or of the senior securities issued by the trust, a ratings downgrade of the liquidity provider for the trust, increases in short term interest rates beyond pre-set maximums, an inability to re-market the senior securities or an inability to obtain liquidity for the trusts. In the case of the TEBS, Freddie will step in first on an immediate basis and the Partnership will have 10 to 14 days to remedy. In each of these cases, the trust will be collapsed. If the proceeds from the sale of the trust collateral are not sufficient to pay the principal amount of the senior securities with accrued interest and the other expenses of the trusts, the Partnership will be required to fund any such shortfall pursuant to its guarantee. In the event of a shortfall the maximum exposure to loss would be approximately $500.3 million prior to the consideration of the proceeds from the sale of the trust collateral. To date, the Partnership has not been required to reimburse the financing facilities for any shortfalls.